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KMID : 1023720060320010069
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Journal of Welfare for the Aged
2006 Volume.32 No. 1 p.69 ~ p.97
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Pension Reforms and Income Support Policy in Retirement in the U. K.
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Shin Chang-Sik
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Abstract
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This Study describes issues surrounding recent changes to pension policy, and the different factors taken into account in pension policy formulation. Also this study investigates the policy approach of New Labour, and the main features of their strategy in terms of pension reforms. In 1998, a Green Paper set out the main proposed direction of government reforms to pensions. This suggested that there were two main objectives of pension policy. The first, aimed at lower-income group, was to ensure that everyone enjoyed a decent income in retirement. The second, addressing a wider group, was to rebuilt trust in the overall pension system, which they believed had been eroded, perhaps particularly in non-state pensions. The Green Paper and subsequent reforms amounted to a wide-ranging series of reforms. Since 1997 UK government has taken the actions establishing Pension Credit, Winter Fuel Payments and real terms increases in the value of the basic State Pension in order to help pensioners escape from poverty. Also government introduced the Minimum Income Guarantee so
that pensioners are lifted out of absolute poverty even relative poverty. These policies have brought significant benefit for pensioners. The high rate of employment has given more people the opportunity to save for their retirement, and has helped contribute to stable growth in the economy. The Government is committed to maintaining this macroeconomic stability. State pensions are among the oldest features of social security systems, and often account for a high proportion of total spending. In the UK, there is also an active private sector for pensions. Over the next 30years, UK governments face the prospect of rapid population ageing. Even more rapid than population change in recent times has been the fast rate of exit from the labour market, prior to state pension age. The relatively low levels of state support for pensioners mean there is still room for policy manoeuvre. Recent policy has focused attention on the poorest pensioners, while encouraging employees on moderate earnings to save more towards their retirement.
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KEYWORD
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pension policy, income support in retirement, welfare reform
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